Accounting Harmonization in ASEAN

Abstract

Accounting harmonization is becoming a big issue in the ASEAN region, since the ASEAN countries are now facing the globalization era, where the interest of international business and investment becomes greater for this region. The objective of this study is to find out how the process of accounting harmonization is taking place and to investigate to what degree there is accounting harmonization in ASEAN region. Furthermore, this research aims to study which efforts are made by ASEAN Federation of Accountants (AFA) to achieve accounting harmonization and to propose to AFA how to facilitate the effort to achieve harmonization at a regional level. Through an analysis of data and empirical findings we found that although several obstacles exist, regional harmonization is beneficial for ASEAN. Regional harmonization in ASEAN depends on the effort of each ASEAN countries. In the case of national level, we found that most national accounting standards comply or are moving to comply with IAS with several modifications. From empirical study, we found that in many respects most companies use the same valuation methods. Moreover, we suggest AFA improves its function with developing the organization structure and increasing good relationship with regional capital market and government from each member country.